Colorado Pot Co-ops Signed Into Law

Colorado Governor John Hickenlooper signed legislation into law June 6 that will allow marijuana businesses to form financial cooperatives, but will explicitly forbid them from calling themselves credit unions.

The new law cited concerns over the cash-only status of marijuana businesses because federal law prevents them from accessing depository accounts in federally chartered or insured institutions.

The new cooperatives would be state chartered and overseen by the Commissioner of Financial Services. Membership will be restricted to licensed marijuana businesses and the cooperative deposits will not carry deposit insurance. Businesses that lose their legal marijuana licenses will not be allowed to remain cooperative members.

One problem facing the financial cooperatives is the requirement to access the Federal Reserve system; banking leaders have said they doubt that will happen.

“They'll never get access to the Federal Reserve System and if they can't do that, the co-ops will never be formed,” said Don Childears, president and CEO of the Colorado Bankers Association, on the CBS program MarketWatch.

“We don't think it will do anything other than allow the state to say, 'We've tried everything we can think of and it won't work, so Congress it's now up to you'," Childears added.

Meanwhile, Denver authorities reported that in the first four months of 2014, they investigated 40 burglaries and 1 robbery at Denver area marijuana businesses.